The Boeing 737, carrying 149 passengers and eight crew members, was on a regular scheduled flight when it came down, just six minutes after taking off from the Ethiopian capital, Addis Ababa.
The airline said Flight ET 302 had crashed near the town of Bishoftu, some 31 miles (50km) southeast of the Addis Ababa.
The airport lost contact with the jet at 8:44am.
The plane is just a few months old having taken its first flight at the end of October.
The airline said in a statement: “At this time search and rescue operations are in progress and we have no confirmed information about survivors or any possible causalities.
“Ethiopian Airlines staff will be sent to the accident scene and will do everything possible to assist the emergency services.”
The Ethiopian prime minister’s office has offered condolences to families.
The state-owned Ethiopian Airlines calls itself Africa’s largest carrier.
